Company Value Calculator

Current Annual Revenue ($):

Current Annual Net Profit ($):

Projected Annual Growth Rate (%):

Industry Revenue Multiple (x):

Industry Profit Multiple (x):

Discount Rate (%):

function calculateCompanyValue() { var currentRevenue = parseFloat(document.getElementById("currentRevenue").value); var currentProfit = parseFloat(document.getElementById("currentProfit").value); var growthRate = parseFloat(document.getElementById("growthRate").value); var revenueMultiple = parseFloat(document.getElementById("revenueMultiple").value); var profitMultiple = parseFloat(document.getElementById("profitMultiple").value); var discountRate = parseFloat(document.getElementById("discountRate").value); var projectionYears = 5; // Hardcoded for simplicity in projecting future profit if (isNaN(currentRevenue) || isNaN(currentProfit) || isNaN(growthRate) || isNaN(revenueMultiple) || isNaN(profitMultiple) || isNaN(discountRate) || currentRevenue < 0 || currentProfit < 0 || growthRate < 0 || revenueMultiple < 0 || profitMultiple < 0 || discountRate < 0) { document.getElementById("companyValueResult").innerHTML = "Please enter valid positive numbers for all fields."; return; } // 1. Revenue-Based Valuation var revenueValuation = currentRevenue * revenueMultiple; // 2. Current Profit-Based Valuation var currentProfitValuation = currentProfit * profitMultiple; // 3. Projected Profit-Based Valuation (Simplified Discounted Future Value) // Calculate future profit after projectionYears var futureProfit = currentProfit * Math.pow((1 + growthRate / 100), projectionYears); // Apply profit multiple to this future profit to get a future valuation var futureProfitValuation = futureProfit * profitMultiple; // Discount this future valuation back to present value var discountedFutureProfitValuation = futureProfitValuation / Math.pow((1 + discountRate / 100), projectionYears); var resultHTML = "

Estimated Company Valuations:

"; resultHTML += "1. Revenue-Based Valuation: $" + revenueValuation.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + ""; resultHTML += "2. Current Profit-Based Valuation: $" + currentProfitValuation.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + ""; resultHTML += "3. Projected Profit-Based Valuation (5 Years): $" + discountedFutureProfitValuation.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}) + ""; resultHTML += "These are different valuation perspectives. A comprehensive valuation would consider many more factors."; document.getElementById("companyValueResult").innerHTML = resultHTML; }

Understanding Your Company's Value

Determining the true value of a company is a complex process, crucial for various business decisions, whether you're looking to sell, attract investors, secure financing, or simply understand your business's worth for strategic planning. This Company Value Calculator provides an estimation based on common valuation methodologies, offering different perspectives on your business's potential worth.

Why is Company Valuation Important?

Selling Your Business: A clear valuation helps set a realistic asking price and provides a strong negotiation position.
Attracting Investors: Investors need to understand the potential return on their investment, which is directly tied to the company's valuation.
Mergers & Acquisitions: Both buyers and sellers rely on valuation to ensure a fair deal.
Strategic Planning: Understanding your company's value can guide decisions on growth strategies, resource allocation, and future investments.
Succession Planning: For internal transfers or estate planning, knowing the company's worth is essential.

How This Calculator Works

This calculator employs three widely recognized, yet simplified, approaches to estimate company value:

1. Revenue-Based Valuation: This method calculates value by multiplying your current annual revenue by an "Industry Revenue Multiple." This multiple is derived from how similar companies in your industry are valued relative to their sales. It's a straightforward approach often used for early-stage companies or those with high growth but low current profits.

2. Current Profit-Based Valuation: This approach multiplies your current annual net profit (often a proxy for EBITDA or operating profit) by an "Industry Profit Multiple." This multiple reflects how much investors are willing to pay for each dollar of profit generated by businesses in your sector. It's a common method for established, profitable companies.

3. Projected Profit-Based Valuation (Discounted Future Value): This method attempts to capture the future earning potential of your company. It projects your current annual net profit forward for a specified number of years (defaulting to 5 years in this calculator) using your "Projected Annual Growth Rate." This future profit is then multiplied by the "Industry Profit Multiple" to get a future valuation. Finally, this future valuation is brought back to its "present value" using a "Discount Rate." The discount rate accounts for the time value of money and the inherent risks associated with future earnings. A higher discount rate implies higher risk or opportunity cost, leading to a lower present value.

Key Inputs Explained:

Current Annual Revenue: Your company's total sales over the last 12 months.
Current Annual Net Profit: Your company's profit after all expenses, interest, and taxes for the last 12 months.
Projected Annual Growth Rate (%): Your realistic expectation for how much your revenue and profit will grow each year.
Industry Revenue Multiple (x): A factor based on comparable company sales. Research industry benchmarks for this.
Industry Profit Multiple (x): A factor based on comparable company profits (e.g., P/E ratio, EV/EBITDA). Research industry benchmarks.
Discount Rate (%): Represents the risk and opportunity cost of investing in your company. It's often tied to your cost of capital or required rate of return for investors. Higher risk = higher discount rate.

Limitations and Disclaimer:

This calculator provides simplified estimates and should not be considered a definitive valuation. Real-world company valuations involve many more complex factors, including:

Market conditions and economic outlook
Competitive landscape
Management team strength
Intellectual property and brand value
Customer base and churn rates
Debt and cash position
Specific assets and liabilities
Future capital expenditure requirements

For an accurate and comprehensive valuation, it is always recommended to consult with financial professionals, business brokers, or valuation experts who can perform a detailed analysis tailored to your specific business and industry.